Public charities & zakat for jihadDecember 10, 2009
A new report from Stanford University reveals that whopping 99 percent of self-described public charities in the U.S. have their applications for tax-exempt status approved by the IRS. The researchers found that “Oversight of the creation of nonprofit organizations, and the conferral of tax exempt privileges that accompany nonprofit status, is weak, bordering on non-existent” (p. 3).
But this cannot be read as a garden variety tale of government incompetence or neglect. These findings pose grave risks for the laundering of zakat donations by Islamic “charities” without any front end scrutiny by the IRS. Here’s an excerpt from the frightening study:
While the IRS has made efforts in recent years to improve oversight of the nonprofit sector by redesigning the tax forms which nonprofit organizations are required to file (if they earn more than $25,000 in revenue in any given year), little attention has been paid to the record of oversight in the determination of nonprofit status. The oversight at the entry point to nonprofit status, as we will show, is weak. Nearly every application on which a decision is rendered is approved.
We focus our attention on the fact that the IRS approves more than 50,000 applications for 501(c)(3) status every year and rejects only a very, very small number of applicants. Obtaining recognition by the IRS as a public charity is an embarrassingly easy thing to do. It is hardly an exaggeration to say that when it comes to oversight of the application process to become a public charity, nearly anything goes.
The problem is that for Islamic jihad and organizations such as Al Qaeda, the main revenue source is zakat funneled through “charities.” Zakat is routed through mosques, Islamic charities, and even foreign states or political parties, sometimes for genuine charity for poverty alleviation, but all too frequently to support jihad.
It is bad enough that little scrutiny is given to these organizations by the U.S. (or by fellow non-Muslim nations of Europe and India), but it is extremely disturbing to learn that so few of the claims of charity status are verified in the first place. Not only were, by extension, the vast majority of Islamic charities that claim tax-exempt status granted it, but their jihadist fellow travelers and donors get to write off their donations on their tax returns.
Maybe I will go to a tea party after all!